Orlando Real Estate

Are Short Sales Getting Better

April 25th, 2011 9:27 AM by David W. Welch

I posed a question to other folks in the real estate industry on David Welch Realtor, my Orlando real estate facebook page. I asked if short sales were moving in the right direction. The overwhelming response was yes, at least as far as the banks responsiveness is concerned. I have to admit that I, for one, feel the same way. In fact I have one customer in the process with Bank of America to obtain a pre-approved short sale. If BofA can acheive their goal of a 30 day approval, it could really change things a lot for short sales.

As much grief as we give the banks, and they do deserve it, there are other factors in the short sale process. There are some sellers who are more motivated to stay in their home as long as possible than they are to get the short sale closed, but I have no idea if this is prevalent or just a small number. More often, the banks are counter-offering, asking for sellers to bring money or sign a note. In some cases, this seems fair enough while others are a bit ridiculous. I do not think buyers have changed much regarding short sales. While the new contract addendum defaults to a 90 day approval period, many buyers like to limit that a bit more. Those that allow 90 days are typically getting antsy by day 30. We just do not get enough feedback from the bank on the progress. So, with all these factors, the question remains; "are short sales getting better?"

The numbers suggest they are not.

Quarter

# Sales Closed

Avg Days to Close

Med Days to Close

1Q 2010

1,019

99

100

2Q 2010

1,362

99

107

3Q 2010

1,136

114

128

4Q 2010

1,125

105

112

1Q 2011

1,153

108

117

The number of sales closed is the actual number of short sales that closed during the quarter. The avg days to close is the average number of days from contract to closing, and the med days to close is the median number. I compared these with REO/Bank owned properties and equity sales that closed in the first quarter of this year. REO properties closed on average in 43 days and equity sales closed on average in 37 days. The respective medians were 46 and 41 days.